Entrepreneurial cooperatives: The impact of entrepreneurial orientation on economic and social performance

Abstract

Although most SMEs are corporations, a substantial proportion are cooperatives and direct competitors in the same business areas. Cooperatives are an organizational alternative combining the ingredients for a sustainable and equal economy in its business model. However, they are often alleged to be inefficient and structurally inert compared to corporations. It is not clear how cooperatives manage to be innovative and efficient, given the characteristics of the cooperative model. Furthermore, there is a lack of understanding how an entrepreneurial orientation (EO) helps them to perform in competition. This study theoretically and empirically examines whether cooperatives benefit from EO in their multi-dimensional goal system. Additionally, the study asks how cooperative-specific collective characteristics relate to EO and performance. Using cross-sectoral data of 368 cooperatives in Switzerland and applying structural equation modelling (PLS), the results show that EO is significantly and positively linked to economic performance. Inter- and intraorganizational cooperation is associated with higher levels of EO and indirectly affects performance through EO. The results suggest that cooperatives, like other SMEs, benefit from EO in competition and can take advantage of cooperative-specific characteristics.